Carro, one of Southeast Asia’s largest auto markets, announced that it reached unicorn valuation after raising a $ 360 million Series C led by SoftBank Vision Fund 2. Among other participants include insurance giant MSIG and Indonesian funds like EV Growth. About 90% of vehicles sold through Carro are used and offer services that cover the entire life cycle of a car, from maintenance to breakdown and parts recycling.
Founded in 2015, Carro started out as an online marketplace for cars, before expanding into other verticals. Co-founder and CEO Aaron Tan told TechCrunch that, roughly speaking, the company’s operations are divided into three sections: wholesale, retail, and fintech. Its wholesale business works with car dealerships who wish to purchase inventory, while its retail business sells to consumers. Its fintech business offers products for both, including B2C auto loans, auto insurance, and B2B working capital loans.
Carro’s last funding announcement dates back to August 2019, when said he expanded his Series B to $ 90 million. The company’s latest funding will be used to fund acquisitions, expand its financial services portfolio, and develop its AI capabilities, which Carro uses to showcase cars online, develop pricing models, and determine how much to charge policyholders. .
It also plans to expand retail services in its main markets: Indonesia, Thailand, Malaysia and Singapore. Carro currently employs around 1,000 people in the four countries and says its revenues grew more than 2.5 times in the fiscal year ending March 2021.
The COVID-19 pandemic helped Carro’s business because people wanted their own vehicles to avoid public transportation and became more receptive to buying cars online. These factors have also helped competitors like OLX Autos and Carsome live well during the pandemic.
The adoption of electric vehicles across Southeast Asia has created a new tailwind for Carro, as people who buy an electric vehicle generally want to sell their combustion engine vehicles. Carro is currently in talks with some of the world’s largest electric vehicle companies looking to get into Southeast Asia.
“For every car that someone typically buys in Southeast Asia, there is always a trade-in. Where do the cars go, right? We are a market, but at a very high level what we do is reuse and recycle. It’s an important part of the company’s environmental sustainability and something that sets us apart from other players in the region, ”said Tan.
Cars generally remain in Carro’s inventory for less than 60 days. Its platform uses computer vision and sound technology to replicate the experience of inspecting a vehicle in person. When someone clicks on a Carro listing, an AI bot automatically engages with them, providing more details about the cost of the car and answering questions. They also see a 360-degree view of the vehicle, its interior and can virtually start the engine to see how it sounds. The lists also provide information on defects and inspection reports.
Since many customers still want to have an in-person preview before finalizing a purchase, Carro recently launched a beta product called Showroom Anywhere. Currently available in Singapore, it allows people to unlock Carro cars parked all over the city, using QR codes, so that they can be inspected at any time of the day, without a salesperson being present. The company plans to add test drives to Showroom Anywhere.
“As a technology company, our job is to make sure that we automate everything we can,” Tan said. “This is the goal of the business and you can only assume that our cost structure and revenue structure will improve over the years. We expect a greater improvement in margins and much more cost reduction. “
Prices are fixed, so buyers don’t have to haggle. Carro determines pricing using machine learning models that examine a vehicle’s details, including its make, model, and mileage, and Carro’s transaction data as well as market information (for example, how much of a particular vehicle is currently available for sale). Carro’s prices are generally in the middle of the market range.
Cars come with a three or seven day money back guarantee and a 30 day guarantee. Once a customer decides to buy a car, they can choose to apply for loans and insurance through Carro’s fintech platform. Tan said Carro’s loan portfolio is around five years old, almost as old as the startup itself, and currently stands at around $ 200 million.
Carro’s insurance is priced according to the driving behavior of policyholders, as monitored by sensors placed in their cars. This allows Carro to create a profile of how a person drives and how likely they are to have an accident or other incident. For example, someone will get better prices if they generally obey the speed limits.
“It sounds a bit futuristic,” Tan said. “But it’s something that has been done in the United States for many years, like GEICO and a whole bunch of other insurers,” including Root Insurance, which recently became public.
Tan said MSIG’s investment in Carro is a “statement that we’re really trying to triple insurance because an insurer has so much connection to what we do. The reason MSIG is a good partner is that, like us, they believe a lot in data and the difference in what we call ‘new age’ insurance, or data-driven insurance. “
Carro is also expanding its after-sales services, including Carro Care, in its four markets. Its after-sales services extend to the very end of a vehicle’s lifecycle and its customers include workshops around the world. For example, if a Toyota Corolla breaks down in Singapore, but its engine is still usable, it can be mined and shipped to a repair shop in Nairobi, and the rest of its parts recycled.
“One thing I always ask in management meetings is where do the cars go to die in Indonesia? Where will cars die in Thailand? There has to be a way, so if there isn’t, we’ll find a way, ”Tan said.
In a statement, SoftBank Investment Advisers Managing Partner Greg Moon said, “Powered by AI, Carro’s technology platform provides consumers with comprehensive services and transparency throughout the ownership process. the car. We are excited to partner with Aaron and the Carro team to support their ambition to expand into new markets and use AI-based technology to make the car buying process smarter, easier. and more secure.